the basics - arviso
TRANSCRIPT
Defense and Homeland Security Consortium
The Basics
Beverly Arviso, CPA, CPCM, CFCMFounder, Arviso, Inc.
Defense and Homeland Security Consortium
Course Objectives
• The Basics• Contract Administration• Contract Accounting• Questions and Answers
Taxpayer ID Number◦ IRS – 1-800-829-1040
Dunn & Bradstreet Number◦ 1-800-333-0505◦ www.dnb.com
Register in the Central Contractor Registration◦ www.ccr.gov
On-line Representations and Certifications Application (ORCA)◦ https://orca.bpn.gov
Cage Code◦ www.dlis.dla.mil
Federal Acquisition System◦Federal Acquisition Regulation (FAR)
www.arnet.gov◦Agency Supplements◦Except as authorized by law, agency
supplements shall not conflict with or be inconsistent with the FAR
Who acts for the Government?◦Contract Specialist◦Contracting Officers
Warrants via SF1402 Only person authorized to enter into contracts on
behalf of the Government◦Administrative Contracting Officer (ACO),
FAR 42.302◦Contracting Officer’s Representatives
COR Training COR Assignment Letter
Most contract types are classified by how they are priced
The objective to be achieved when negotiating contracts type and price is to agree on a type and price that will result in reasonable contractor risk while providing the contractor with the greatest incentive for efficient and economical performance
Impact of Contract Types◦ The amount of government financial review and
surveillance is determined by the type of contract awarded
◦ The government will have greater interest in the company’s accounting practices where incurred costs are the primary factor in establishing the amount the contracting agency ultimately pays for the work performed
◦ When the final contract price is unaffected by actual cost or performance, government procurement policy requires considerably less review and surveillance
Contract Types◦ Firm Fixed Price (FFP)◦ Time-and-Materials (T&M)◦ Cost Reimbursement◦ Indefinite Delivery/Indefinite Quantity (IDIQ)
Delivery vs. Task Order◦ Government Wide Acquisition Contracts (GWACs)◦ Multiple Award Contracts
RFP Process◦ Identification of a need
Site Surveys Industry Days Draft RFPs
◦ Bid/No Bid Decision◦ Identify Team
Internal and External Parties Teaming Agreements Non-Disclosure Agreements
◦ Release of RFP Begin writing BEFORE RFP is released….how?
Read the solicitation (and read it again and again)◦ Determine Contract Type◦ Schedule B, Supplies or Services and Prices/Cost◦ Schedule C, Statement of Work◦ Schedule L, Instructions, Conditions, and Notices to
Offerors◦ Schedule M, Evaluation Factors for Award
What is the difference between cost and pricing?
The government is able to determine the price to be fair and reasonable without evaluating the separate cost elements and proposed profit
Competition in the market determines the price
Price Analysis Techniques◦ Competitive price proposals◦ Comparison of previously proposed prices for the
same or similar items or service◦ Commercial items or services◦ Prices set by law or regulation◦ Catalog prices
Price Analysis alone may not be sufficient for:◦ Sole source FFP and T&M procurements◦ Modification or changes to existing FFP or T&M
Contracts
Analyzing the various cost elements that make up the price, e.g., labor, materials, overhead, and profit, in order to determine if the price proposed is fair and reasonable to the Government
Price analysis must still be performed Each element of cost must be verifiable
◦ Direct Labor◦ Materials◦ Travel◦ Subcontract costs
Actual direct labor rates Labor category rates Blended rates (covers several categories) Weighted average category rates Category rates when using prime and
subcontractor labor
Define direct costs Define indirect costs
◦ Costs that can’t be directly assigned to the contract◦ Consist of cost pools and allocation bases
Pools are defined by placing costs in logical groupings, e.g., fringe costs, overhead costs, G&A costs, unallowable, etc.
The allocation base is defined as some measure of cost that can be used to allocate the pool cost, e.g., direct labor hours, direct labor dollars, machine hours, etc.
◦ Indirect rate = cost pools/allocation base
Document indirect rates
Indirect Rates◦ vary from company to company◦ are valid for the course of 1 fiscal year◦ determine the “multiplier” for the company
Are used for:◦ Budgeting◦ Billing◦ Proposals◦ Forward pricing rate agreements (FPRAs) (FAR 15.407-3)
Negotiations◦ Pre and post negotiation memorandums (PNMs), FAR
15.406-3 Consider using for subcontract negotiations
◦ Certificate of Current Cost or Pricing Data, FAR 15.406-2
Contract Award◦ Request Debrief
Must be in writing Request must be received within 3 days after notification Invite teaming partners or conduct separate debrief
depending on size and complexity
Contract Award Meeting◦Can vary by size and complexity of
procurement◦Corporate policy defines
Attendees (including teaming partners) Roles and Responsibilities of Attendees
Contract Award Meeting◦ Preparation and Review of a Contract Brief
Sets forth job charging requirements Sets forth Billing and Payment Requirements
Defense Finance and Accounting Services (DFAS) Wide Area Workflow (WAWF) Sample Invoice can be found at www.dcaa.mil
Set forth any pertinent clauses or special terms Small Business Set Aside Requirements Publicity notification requirements 75% notification Fee withholds
File Documentation◦ RFP◦ Proposals (All Volumes)◦ Teaming Agreements/Non-Disclosure Agreements◦ Original contract and all agreements◦ Modifications◦ Task and Delivery Orders and all Modifications◦ Correspondence ◦ Update contract brief
Changes◦ Inside or outside the scope of work
Work at Risk◦ Tracking and approval process◦ Subcontractors?
Contract Close-out◦ Incurred Cost Submissions
Sample can be found at www.dcaa.mil ◦ Final Invoice
Sample can be found at www.dcaa.mil ◦ Release of Claims and Assignment of Refunds,
Rebates, and Credits
Infrastructure Needed◦ Accounting System Polices and Procedures
General Ledger Design Invoicing Project Budgeting and Reporting
◦ Timekeeping Policies and Procedures◦ Travel and Expense Reimbursement◦ Purchasing and Receiving
Segregation of Costs (FAR Part 31)◦ System must be able to track costs and allocate
to projects◦ Direct vs. Indirect Cost
Clear distinction on chart of accounts Direct costs are recorded on a job by job basis Indirect costs are calculated at the corporate level and
allocated to the jobs◦ Development of Indirect Rates
Fringe Overhead G&A Unallowable
Billing and Collections Procedures and Controls◦ Contract Review/Preparation of Contract Briefs◦ Invoice Preparation
Generated from accounting system books and records
◦ Invoice Review by Program Manager◦ Payment monitoring
Budgeting and Reporting◦ Corporate Indirect Rate Budget◦ Project Budgets◦ Reporting Budget vs. Actual
Manual or electronic Record all hours worked Time should be entered daily, in ink, for all employees Job Number and Project Name should be pre-printed if
possible Charge Numbers should be provided by Supervisor not
accounting department Vacation, holiday, sickness, and excused time should
be recorded Annual Training Proof of Process Compliance
FAR Part 31.205-46 Expense Reports
◦ Each employee must complete an expense report for travel
◦ Receipts should be required for all claimed costs◦ Document
Date and place of the expense Purpose of the trip Name of employee and title or relationship to contractor
Use lowest reasonable cost Per Diem Rates
◦ www.gsa.gov
Requestor Submits a Purchase Request Purchasing Issues the Purchase Orders (POs)
◦ Prepare and obtain approval prior to making the purchase◦ POs should be sequentially numbered and maintained in
a log Item is Received and Compared to the PO Invoice is Received and Payment is Made for
Accepted Item(s) If property is purchased with Government funds,
it is considered Government Furnished Property and FAR Part 45 should be followed
Defense Contract Audit Agency (DCAA)◦ Types of Audits
Accounting system Financial capability Pre-award Timekeeping Billing Incurred Cost
DCAA Resources◦ www.dcaa.mil
Information for Contractor’s Guide DCAA Audit Programs DCAA Contract Audit Manual
